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Enhancing Credit Supply for Large Borrowers through Market Mechanism

(ii) If a borrower becomes a ‘specified borrower’ during the last quarter of the FY 2016-17, say on March 31, 2017, then what will be the date of application of the disincentive mechanism? +

As the disincentive mechanism will be applicable from the FY succeeding the FY in which a borrower becomes a ‘specified borrower’, the disincentive mechanism will be applicable from April 1, 2017 for any borrowing from the banking system beyond the NPLL.

2. ಅರ್ಟಿಜಿಎಸ್ ಅಡಿಯಲ್ಲಿ ಪಾವತಿಗಳು ಅಂತಿಮಾವಾಗಿರುತ್ತವೆಯೇ ಹಾಗೂ ಬದಲಾಯಿಸಲಾಗದವುಗಳಾಗಿರುತ್ತವೆಯೇ?

ಉತ್ತರ. ರಿಸರ್ವ್ ಬ್ಯಾಂಕ್ ಆಫ್ ಇಂಡಿಯಾದ ಬುಕ್ಗಳಲ್ಲಿ ಹಣದ ಸಂದಾಯ ನಡೆಯುತ್ತದೆ ಎಂದು ಪರಿಗಣಿಸಿ, ಪಾವತಿಗಳು ಅಂತಿಮವಾಗಿರುತ್ತವೆ ಹಾಗೂ ಬದಲಾಯಿಸಲಾಗುವುದಿಲ್ಲ.

2. Can a card be issued to other loan accounts such as overdraft facility, cash credit facility, working capital loan, etc.?

Response: Yes, paragraphs 7(b) and 7(c) of the MD have enabled issuance of various types of credit cards which can be customized to access the limits available in different loan accounts, duly aligned to the terms and conditions stipulated for the concerned loan account. For example, a customer availing an overdraft facility from a bank can be issued a type of credit card to access the funds available under the facility. The terms of usage of this credit card (interest charged, repayment schedule, penalty, cash withdrawal limit etc.,) shall correspond to the terms and conditions applicable to the overdraft facility.

Further, para 7(c) provides adequate flexibility to the card-issuers to design Business Credit Cards as envisaged in their Credit Card policy. However, it may be noted that banks cannot issue debit cards to cash credit/loan accounts

2. Are all banks part of the UDGAM portal? What percentage of the unclaimed deposits they represent?

ANS: No. As on March 4, 2024, there are 30 banks, which are part of UDGAM portal, and they cover around 90% of unclaimed deposits (in value terms) in Depositor Education and Awareness (DEA) Fund of RBI. The list of these banks is available on home page of UDGAM (https://udgam.rbi.org.in/unclaimed-deposits/#/login) and in the RBI Press Release dated October 5, 2023 (https://rbi.org.in/en/web/rbi/-/press-releases/money-market-operations-as-on-december-15-2023). The remaining banks are in the process of getting on-boarded.

2. Which are the amounts credited to DEA Fund?

ANS: The amounts credited to the DEA Fund are the credit balances in any deposit account maintained with banks (Commercial Banks, Co-operative Banks), which have not been operated upon for 10 years or more by the depositor, or any amount remaining unclaimed for 10 years or more, and includes the following:
(a) savings bank deposit accounts;
(b) fixed or term deposit accounts;
(c) cumulative/recurring deposit accounts;
(d) current deposit accounts;
(e) other deposit accounts in any form or with any name;
(f) cash credit accounts;
(g) loan accounts after due appropriation by the banks;
(h) margin money against issue of Letter of Credit/Guarantee etc., or any security deposit;
(i) outstanding telegraphic transfers, mail transfers, demand drafts, pay orders, bankers cheques, sundry deposit
accounts, vostro accounts, inter-bank clearing adjustments, unadjusted National Electronic Funds Transfer (NEFT) credit balances and other such transitory accounts, unreconciled credit balances on account of Automated Teller Machine (ATM) transactions, etc.;
(j) undrawn balance amounts remaining in any prepaid card issued by banks but not amounts outstanding against travellers cheques or other similar instruments, which have no maturity period;
(k) rupee proceeds of foreign currency deposits held by banks after conversion of foreign currency to rupees in accordance with extant foreign exchange regulations; and
(l) such other amounts as may be specified by the Reserve Bank from time to time.

2. Do assets already sold need to be displayed on the website? When shall the secured asset possessed be removed from the list published on the website?

Ans: No, the assets possessed and already sold under SARFAESI Act, 2002 need not be displayed on the website.

The secured assets possessed by the REs shall be removed from the website in the event of the following circumstances:

(i) When the secured asset is sold; or

(ii) When the secured creditor receives the outstanding amount (which includes the principal, interest and any other dues payable by the borrower to the secured creditor) or after payment of the agreed settlement amount from the borrower.

2. Trade credit and structured obligations have been excluded from applicability of the circular. Whether Penal interest can be charged on these products, given the deletion of provision related to Penal interest from existing RBI guidelines on “Interest rates on advances”?

The instructions as contained in the circular are not applicable to products covered under the RBI Master Direction - External Commercial Borrowings, Trade Credits and Structured Obligations dated March 26, 2019 (as amended from time to time) and the banks may be guided by the relevant instructions contained in the aforesaid Master Direction.

2. How will inflation protection be provided to both principal and interest rate? Whether inflation component will be paid along with interest? +

Inflation component on principal will not be paid with interest but the same would be adjusted in the principal by multiplying principal with index ratio (IR). At the time of redemption, adjusted principal or the face, whichever is higher, would be paid.
Interest rate will be provided protection against inflation by paying fixed coupon rate on the principal adjusted against inflation.
An example of cash flows on IIBs is furnished below.

Example 1 (For illustration purpose)
Year	Period	Real Coupon	Inflation Index	Index Ratio	Inflation adjusted principal	Coupon Payments	Principal Repayment
I	II	III	IV	V_ti=(IV_ti/IV_t0)	VI=(FV*V)	VII=(VI*III)	VIII
0	28-May-13	1.50%	100	1.00	100.0
1	28-May-14	1.50%	106	1.06	106.0	1.59
2	28-May-15	1.50%	111.8	1.12	111.8	1.68
3	28-May-16	1.50%	117.4	1.17	117.4	1.76
4	28-May-17	1.50%	123.3	1.23	123.3	1.85
5	28-May-18	1.50%	128.2	1.28	128.2	1.92
6	28-May-19	1.50%	135	1.35	135.0	2.03
7	28-May-20	1.50%	138.5	1.39	138.5	2.08
8	28-May-21	1.50%	142.8	1.43	142.8	2.14
9	28-May-22	1.50%	150.3	1.50	150.3	2.25
10	28-May-23	1.50%	160.2	1.60	160.2	2.40	160.2
Example 2 (For illustration purpose)
0	28-May-13	1.50%	100.0	1.00	100	1.50
1	28-May-14	1.50%	106.0	1.06	106	1.59
2	28-May-15	1.50%	111.0	1.11	111	1.67
3	28-May-16	1.50%	104.0	1.04	104	1.56
4	28-May-17	1.50%	98.0	0.98	98	1.47
5	28-May-18	1.50%	99.0	0.99	99	1.49
6	28-May-19	1.50%	105.5	1.06	105.5	1.58
7	28-May-20	1.50%	110.2	1.10	110.2	1.65
8	28-May-21	1.50%	106.5	1.07	106.5	1.60
9	28-May-22	1.50%	104.2	1.04	104.2	1.56
10	28-May-23	1.50%	99.2	0.99	99.2	1.49	100

2. Can one obtain additional foreign exchange for medical treatment outside India?
+

A person visiting abroad for medical treatment can also obtain foreign exchange upto the amount recommended by the doctor or hospital abroad for his treatment. This exchange is to meet the expenses involved in treatment and in addition to the amount referred to in paragraph 1 above.

2. What credits can be made to such accounts ? +

Funds remitted from outside India or those obtained by sale of foreign exchange brought by the tourists to India can be credited to the NRO account.

2. Can foreign nationals resident in India open resident account ? +

Yes. Foreign nationals resident in India can open and maintain resident Rupee account in India.

Who has the authority to permit remittance to Foreign Satellite Channels in respect of advertisement aired on its channel with effect from June 1, 2000? +

Authorised dealers can permit such remittance, subject to the position stated for Question 1 above, after netting of the commission of local advertisement agent, as also local television channel agent and applicable taxes. Authorised dealers are required to satisfy themselves about the applicant's eligibility to advertise, bonafides of the transactions, and that they are in compliance with the Government of India Notification No.G.S.R.381(E) dated May 3, 2000 and S.O.301(E) dated March 30, 2001.

2. WHAT IS THE OBJECTIVE OF ADF? +

ADF seeks to ensure submission of correct and consistent data from the banks straight from their systems to Reserve Bank without any manual intervention.

2. What is the objective of the PSS Act, 2007? +

Ans. The PSS Act, 2007 provides for the regulation and supervision of payment systems in India and designates the Reserve Bank of India (Reserve Bank) as the authority for that purpose and all related matters. The Reserve Bank is authorized under the Act to constitute a Committee of its Central Board known as the Board for Regulation and Supervision of Payment and Settlement Systems (BPSS), to exercise its powers and perform its functions and discharge its duties under this statute. The Act also provides the legal basis for “netting” and “settlement finality”. This is of great importance, as in India, other than the Real Time Gross Settlement (RTGS) system all other payment systems function on a net settlement basis.

2. What happens if cheques / instruments are lost in transit / in clearing process? +

If cheques are lost in transit or in the clearing process or at the paying bank's branch under physical instrument delivery clearing, the bank should immediately bring the same to the notice of the presenting customer (beneficiary)’s notice so that the customer can inform the drawer to record stop payment and can also take care that other cheques issued anticipating the credit arising out of the lost cheque are not dishonoured due to non-credit of the amount of the lost cheques / instruments.

It may however be noted that the probability of losing the physical instrument in the hands of paying bank is remote in the locations covered by CTS as clearing is undertaken on the basis of images. If the instrument is lost after lodging with the collecting bank but before truncating the same for sending through image-based clearing, the presenting bank should follow the procedure indicated above.

The customer is entitled to be reimbursed by banks for related expenses for obtaining duplicate instruments and interest for reasonable delays in obtaining the same.

Q.2 What legal forms can IDF be set up as and who will be the regulators? +

Ans : Infrastructure Debt Funds (IDFs), can be set up either as a Trust or as a Company. A trust based IDF would normally be a Mutual Fund (MF), regulated by SEBI, while a company based IDF would normally be a NBFC regulated by the Reserve Bank.

Q.2. What are the exposure limits for NBFC-IFCs?

Ans. Under scale-based regulations (SBR) for NBFCs, an NBFC-IFC can be in the middle layer or the upper layer (and not in the base layer), as the case may be. Depending on the layer under which an NBFC-IFC is placed, the exposure limits are given below:

	Exposure limits for the NBFC- IFCs in the middle layer (as a % of Tier 1 capital)	Exposure limits for NBFC-IFCs in the upper layer as per large exposure framework (as % of eligible capital base)
Single borrower	30%	25% (additional 5% with Board approval)
Single group of borrowers	50%	35%

2. What is NDS-OM Web Module? +

To further enhance the access of such Gilt Account Holders (herein after referred to as GAHs) to NDS-OM, an internet based web application is provided to such clients who can now have direct access to NDS –OM, the system owned by RBI. The internet based utility permits GAH to directly trade (buying and selling) in Government Securities (G-Sec) in the secondary market. The access is however, subject to controls by respective Primary Member (PM) with whom GAHs have gilt account and current account.

2. What is an application ? +

An application can be any application, addressed to any department of RBI, through which members of the public can apply (except such applications for which specific instructions have been given regarding mode of submission, etc.)

Q.2. What is the status of lending by banks to this sector ? +

Bank’s lending to the Micro, Small and Medium enterprises as under is eligible to be reckoned for priority sector advances:

(i) The definition of MSMEs will be as per Government of India, Gazette Notification S.O. 2119 (E) dated June 26, 2020 read with circulars FIDD.MSME & NFS.BC.No.3/06.02.31/2020-21 dated July 2, 2020, FIDD.MSME & NFS. BC. No.4/06.02.31/2020-21 dated August 21, 2020, FIDD.MSME & NFS.BC.No.13/06.02.31/2021-22 dated July 07, 2021 and updated from time to time.

(ii) Further, such MSMEs should be engaged in the manufacture or production of goods, in any manner, pertaining to any industry specified in the First Schedule to the Industries (Development and Regulation) Act, 1951 or engaged in providing or rendering of any service or services. All bank loans to MSMEs conforming to the above guidelines qualify for classification under priority sector lending.

Detailed guidelines on lending to the Micro, Small and Medium enterprises are available in our Master Direction FIDD.MSME & NFS.12/06.02.31/2017-18 dated July 24, 2017. The instructions issued by RBI, to banks, on various matters are available on our website www.rbi.org.in.

2. Is it permissible for REs to offer differential interest rates on green deposits? Whether there is any bearing on the interest rate payable by REs to depositors, if the funds raised under the framework remain unallocated/ unutilized towards the green activities or projects? Is there any restriction on premature withdrawal of green deposits?

(a) The extant guidelines as detailed below do not permit REs to offer differential rate of interest on green deposits:

(b) The REs shall pay interest on green deposits to their customers as per agreed terms and conditions and aforesaid directions irrespective of allocation/ utilisation of proceeds.

(c) There is no restriction on premature withdrawal of green deposits, however, the REs, shall adhere to the extant guidelines referred to above. Further, premature withdrawal would not have any bearing on the activities/ projects undertaken using the proceeds of green deposits.

2. RBI may please clarify the treatment of MTM appreciation /depreciation of the IIBs, whether this would form a separate classification or a part of the Government Securities ‘classifcation’ and the appreciation/depreciation netted out with other G.Secs under this classification. +

Ans: IIBs are government securities and as such should be classified accordingly as indicated in para 2 (i) of Master circular on investments:

Classification

i) The entire investment portfolio of the banks (including SLR securities and non-SLR securities) should be classified under three categories

viz. 'Held to Maturity',

'Available for Sale' and 'Held for Trading'

* However, in the balance sheet, the investments will continue to be disclosed as per the existing six classifications:

viz. a) Government securities,

b) Other approved securities,

c) Shares,

d) Debentures & Bonds,

e) Subsidiaries / joint ventures and

f) Others (CP, Mutual Fund Units, etc.).

2. What can I read for further guidance on RTGS and NEFT payment systems? +

Ans. Following links can be perused for understanding RTGS and NEFT systems: -

RTGS System Regulations

NEFT Procedural Guidelines

FAQs on RTGS

FAQs on NEFT

Master Guidelines on Access Criteria for Payment Systems

Q2. Who are the members of the ACU? +

Ans. The Central Banks and the Monetary Authorities of Bangladesh, Bhutan, India, Iran, Maldives, Myanmar, Nepal, Pakistan and Sri Lanka are currently the members of the ACU.

2. What does the DICGC insure ? +

The DICGC insures all deposits such as savings, fixed, current, recurring, etc. deposits except the following types of deposits
Deposits of foreign Governments;
Deposits of Central/State Governments;
Inter-bank deposits;
Deposits of the State Land Development Banks with the State co-operative bank;
Any amount due on account of and deposit received outside India
Any amount, which has been specifically exempted by the corporation with the previous approval of Reserve Bank of India

Q.2. At how many centres and bank branches is the EFT facility available? +

Ans The EFT system presently covers all the branches of the 27 public sector banks and 55 scheduled commercial banks at the 15 centres (viz., Ahmedabad, Bangalore, Bhubneshwar, Kolkata, Chandigarh, Chennai, Guwahati, Hyderabad, Jaipur, Kanpur, Mumbai, Nagpur, New Delhi, Patna and Thiruvananthpuram). Funds transfer is possible from any branch of these banks at these centres to other branch of any bank at these centres both inter-city and intra-city.

2. What is a foreign currency account? +

Answer: A Foreign Currency Account is an account held or maintained in currency other than the currency of India or Nepal or Bhutan.

2. ’ನೊ-ಫ್ರಿಲ್ಸ್’ ಖಾತೆಯಲ್ಲಿ 'ನಿಲ್' ಅಥವಾ ಬಹಳಷ್ಟು ಕನಿಷ್ಠ ಬ್ಯಾಲೆನ್ಸ್ ಮೇಲೆ ನೀಡಲಾದ ಮಾರ್ಗದರ್ಶನಗಳು ಬೇಸಿಕ್ ಸೇವಿಂಗ್ಸ್ ಬ್ಯಾಂಕ್ ಡಿಪೋಸಿಟ್ ಅಕೌಂಟ್ ಆರಂಭಿಸಿದ ನಂತರವೂ ಮುಂದುವರೆಯುವುದೇ?

ಇಲ್ಲ. 'ನೋ-ಫ್ರಿಲ್ಸ್' ಖಾತೆಗಳ ಮೇಲೆ ನವೆಂಬರ್ 11, 2005ರ ಸುತ್ತೋಲೆ ಸಂಖ್ಯೆ DBOD.No.Leg BC.44/09.07.005/2005-06ರಲ್ಲಿರುವ ಸೂಚನೆಗಳನ್ನು ರದ್ದುಗೊಳಿಸಿ, ಬ್ಯಾಂಕುಗಳು ತಮ್ಮ ಎಲ್ಲಾ ಗ್ರಾಹಕರಿಗೆ ’ ಬೇಸಿಕ್ ಸೇವಿಂಗ್ಸ್ ಬ್ಯಾಂಕ್ ಡಿಪೋಸಿಟ್ ಅಕೌಂಟ್ ’ನ್ನು ಅಲ್ಲಿ ನಮೂದಿಸಲಾದಕನಿಷ್ಠ ಸಾಮಾನ್ಯ ಸೌಲಭ್ಯಗಳೊಂದಿಗೆ ನೀಡಬೇಕೆಂದು ಆಗಸ್ಟ್ 10, 2012ರ DBOD.No.Leg.BC.35/09.07.005/20012-13 ಸುತ್ತೋಲೆಯಲ್ಲಿ ಆದೇಶಿಸಲಾಗಿದೆ. ಬ್ಯಾಂಕುಗಳು ಈಗಿರುವ ’ ನೋ-ಫ್ರಿಲ್ಸ್’ ಖಾತೆಗಳನ್ನು ’ ಬೇಸಿಕ್ ಸೇವಿಂಗ್ಸ್ ಬ್ಯಾಂಕ್ ಡಿಪೋಸಿಟ್ ಅಕೌಂಟ್ಸ್’’ಗಳಾಗಿ ಪರಿವರ್ತಿಸಬೇಕಾಗಿದೆ.

2. ಪಿಪಿಐಗಳು ಎಂದರೇನು? +

ಉತ್ತರ. ಪಿಪಿಐಗಳು ಅಂತಹ ಉಪಕರಣಗಳಲ್ಲಿ ಸಂಗ್ರಹವಾಗಿರುವ ಮೌಲ್ಯದ ಮೇಲೆ ಹಣಕಾಸು ಸೇವೆಗಳು,ಹಣ ರವಾನೆಗಳು, ಮುಂತಾದವುಗಳನ್ನೊಳಗೊಂಡು , ಸರಕುಗಳು ಹಾಗೂ ಸೇವೆಗಳನ್ನು ಖರೀದಿಸಲು ಅನುಕೂಲವಾಗುವ ಸಾಧನಗಳಾಗಿವೆ. ದೇಶದಲ್ಲಿ ನೀಡಬಹುದಾದ ಪಿಪಿಐಗಳನ್ನು ಮೂರು ಪ್ರಕಾರಗಳ ಅಡಿಯಲ್ಲಿ ವರ್ಗೀಕರಿಸಲಾಗಿದೆ ಅಂದರೆ [1]ಕ್ಲೋಸ್ಡ್ ಸಿಸ್ಟಮ್ ಪಿಪಿಐಗಳು , [2]ಸೆಮಿ- ಕ್ಲೋಸ್ಡ್ ಸಿಸ್ಟಮ್ ಪಿಪಿಐಗಳು, ಹಾಗೂ [3]ಓಪನ್ ಸಿಸ್ಟಮ್ ಪಿಪಿಐಗಳು.

2. ವ್ಹೈಟ್ ಲೇಬಲ್ ಎಟಿಎಮ್ಗಳು [ಡಬ್ಲ್ಯೂಎಲ್ಎಗಳು] ಯಾವುವು ?

ಉತ್ತರ. ಬ್ಯಾಂಕೇತರರು ಸ್ಥಾಪಿಸಿದ, ಒಡೆತನಹೊಂದಿದ ಹಾಗೂ ನಿರ್ವಹಿಸುವ ಎಟಿಎಮ್ಗಳನ್ನು ಡಬ್ಲ್ಯೂಎಲ್ಎಗಳು ಎಂದು ಕರೆಯಲಾಗುತ್ತದೆ. ಬ್ಯಾಂಕೇತರ ಎಟಿಎಮ್ ನಿರ್ವಾಹಕರುಗಳಿಗೆ ಪೇಮೆಂಟ್ &ಸೆಟ್ಲಮೆಂಟ್ ಸಿಸ್ಟಮ್ಸ್ ಆ್ಯಕ್ಟ್ ,2007ಅಡಿಯಲ್ಲಿ ರಿಸರ್ವ್ ಬ್ಯಾಂಕ್ ಆಫ್ ಇಂಡಿಯಾ[ ಆರ್ಬಿಐ] ಅಧಿಕಾರ ನೀಡಿದೆ. ಅಧಿಕೃತ ಡಬ್ಲ್ಯೂಎಲ್ಎನಿರ್ವಾಹಕರ ಪಟ್ಟಿಯು ಆರ್ಬಿಐ ವೆಬ್ಸೈಟ್ ನಲ್ಲಿ https://www.rbi.org.in/Scripts/PublicationsView.aspx?id=12043ಲಿಂಕ್ನಲ್ಲಿ ಲಭ್ಯವಿರುತ್ತದೆ

2. Which transactions should include LEI information ? +

Ans. All single payment transactions of ₹50 crore and above undertaken by entities (non-individuals) should include remitter and beneficiary LEI information. This is applicable to transactions undertaken through the NEFT and RTGS payment systems.

In case of RTGS, both customer payment and inter-bank transactions meeting the above criterion should include LEI information.

2. Who is responsible for FEMA compliance for trade transactions? +

A. For Debit to SNRR A/c (for onward credit domestically)

In case of receipt of Export proceeds by an Indian party by debit to SNRR account of the overseas buyer:

As in case of any inward remittance received for export payment, the AD bank handling the export documents shall ensure compliance with all export related rules/regulation/ guidelines prescribed under FEMA.
The AD bank maintaining SNRR account shall be responsible for performing due diligence of the overseas client and related FEMA compliances. Further, it shall, while transferring the funds to the AD bank of the Indian exporter (beneficiary’s bank), provide complete KYC details of the account holder (Name, address, country etc.), purpose of remittance, currency and amount of remittance, name and account number of the beneficiary etc. so as to enable the latter to close the entries in EDPMS with the respective remittance.

B. For Credit to SNRR A/c (received from a domestic account)

In case of payment for Imports by an Indian party by credit to the SNRR account of the overseas seller:

As in case of any outward remittance sent for import payment, the AD bank handling import documents and remitting funds (Importer’s Bank) shall ensure compliance with all related import rules/regulations/guidelines prescribed under FEMA.
It shall also communicate all details related to the importer as required by the AD bank maintaining the SNRR account of the overseas client.

C. Similarly, in case of ECB, Trade credits, foreign investments, etc., the designated AD bank maintaining the resident customer’s A/c will be responsible for ensuring compliance with FEMA provisions, including issuance of FIRC, wherever applicable, on the same lines as it would have done in case of money received in freely convertible currency through an inward remittance. Further, the banks involved in the transaction shall be responsible for sharing of the details of the transactions on similar lines as above.

2. Who are the participants in TReDS ? +

Ans. Sellers, buyers and financiers are the participants on a TReDS platform.

2. Can foreign nationals resident in India open resident account? +

Yes. Foreign nationals resident in India can open and maintain resident Rupee account in India.

Q 2: What is new in this arrangement?

Answer: The settlement through Indian Rupees (INR) is an additional arrangement to the existing system that uses freely convertible currencies and will work as a complimentary system. This will reduce dependence on hard (freely convertible) currency.

2. Whether Model Education Loan Scheme, 2022, is applicable to Regional Rural Banks, Cooperative Banks, NBFCs, Fintech companies, etc.?

No. Model Education Loan Scheme, 2021 is currently applicable to Scheduled Commercial Banks (SCBs) only. The list of SCBs is available here.

Q 2. Whether all members of a household are mandatorily required to become borrowers of a microfinance loan? +

Ans. The directions require assessment of income and indebtedness at household level. There is no requirement of treating all members of the household as applicants/ borrowers of a loan which can be provided to an individual member. Board-approved policies of REs may include the methodologies/ operational frameworks to assess income and indebtedness of all members of the household.

Q2. Who are authorised persons? +

Answer: An authorised person is an entity authorised by the Reserve Bank of India to deal in forex. It can be an authorised dealer, money changer, off-shore banking unit or any other person for the time being authorised under Sub-Section (1) of Section 10 of FEMA. The list of authorised persons is available here.

2. In para 2.4 of the circular, the age limit of not more than 55 years is mentioned as one of the eligibility criteria for appointment as CCO. What would be the reference point for considering the age limit? +

The age-limit in para 2.4 of the aforesaid circular was given with the objective of ensuring that the responsibilities associated with CCO are treated as a specialised and core function. Keeping in view the above principle, if a person identified as CCO is above the age of 55 years, however, she/he has had continuous association with the compliance function either as CCO or otherwise, the age limit of 55 years may be taken as the date from when the continuous association with the compliance function started for the identified CCO. Illustratively, if a person identified for CCO role has age more than 55 years but she/he has been continuously associated with the compliance function prior to completing the age of 55 years, the person would be eligible for such appointment.

2. Where should the payment data be stored? +

The entire payment data shall be stored in systems located only in India, except in cases clarified herein.

Q 2. What is an NBFC-Factor ? +

Ans. NBFC- Factor means a non-banking financial company fulfilling the Principal business criteria i.e. whose financial assets in the factoring business constitute at least 75 percent of its total assets and income derived from factoring business is not less than 75 percent of its gross income, has Net Owned Funds of Rs. 5 crore and has been granted a certificate of registration by RBI under section 3 of the Factoring Regulation Act, 2011.

2. What is this scheme ? +

The legal tender character of the bank notes in denominations of ₹ 500 and ₹ 1000 issued by the Reserve Bank of India till November 8, 2016 (hereinafter referred to as Specified Bank Notes) stands withdrawn. In consequence thereof these Bank Notes cannot be used for transacting business and/or store of value for future usage. The Specified Bank Notes (SBNs) were allowed to be exchanged for value at RBI Offices till December 30, 2016 and till November 25, 2016 at bank branches/Post Offices and deposited at any of the bank branches of commercial banks/Regional Rural Banks/Co-operative banks (only Urban Co-operative Banks and State Co-operative Banks) or at any Head Post Office or Sub-Post Office during the period from November 10, 2016 to December 30, 2016.

2. Who is eligible to deposit in PMGKS? +

The deposit under this Scheme shall be made by any person who declares undisclosed income under sub-section (1) of section 199C of the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016.

2.What are the assets out of/ from which funds may be remitted and by whom? +

Answer:

A foreign national of non-Indian origin (other than Nepal/ Bhutan/ PIO)	An NRI/ PIO	Indian entity	A branch or office established in India by a person resident outside India
1. The person has retired from employment in India. 2. Inherited assets from a person referred to in Sec 6(5)¹ of FEMA 3. The person is a non-resident widow/ widower and has inherited assets from her/ his deceased spouse who was an Indian national resident in India. May remit up to USD 1 Million in a financial year	1. From the balances of NRO account – subject to declaration* 2. Sale proceeds of assets 3. Assets acquired from legacy/ inheritance/ deed of settlement May remit up to USD 1 Million in a financial year *Where the remittance is to be made from the balances held in the NRO account, the Authorised Dealer should obtain an undertaking from the account holder stating that “the said remittance is sought to be made out of the remitter’s balances held in the account arising from his/ her legitimate receivables in India and not by borrowing from any other person or a transfer from any other NRO account and if such is found to be the case, the account holder will render himself/ herself liable for penal action under FEMA.”	Its contribution towards PF/ superannuation fund/ pension for expatriate employee who are resident but not permanently resident.	Remit its winding up proceeds after submission of requisite documents

2. Who can open an EEFC account? +

All categories of foreign exchange earners, such as individuals, companies, etc., who are resident in India, may open EEFC accounts.

2.From where one can buy foreign exchange? +

Foreign exchange can be purchased from any authorised dealer. Besides authorised dealers, full-fledged money changers are also permitted to release exchange for business and private visits.

Q.2 Who is eligible to make overseas investment ? +

Resident corporate entities and partnership firms registered under the Indian Partnership Act, 1932 are eligible to make investment abroad in Joint Ventures/ Wholly Owned Subsidiaries. Resident individuals may also invest abroad as detailed in Q.3.

2. RBI has advised banks to frame their own Cheque Collection Policy covering various aspects relating to collection of Rupee cheques. Are there similar guidelines for collection of foreign currency cheques as well? +

Cheques denominated in US Dollars (USD cheques) constitute a major share of foreign currency cheques deposited by customers for realisation. In order to make the USD cheque collection process more efficient and transparent, RBI has advised banks to refine their USD cheque collection procedures and frame their own USD Cheque Collection Policy covering aspects like mode of collection, collection period, charges for collection, etc. This policy shall be made part of their regular Cheque Collection Policy.

Q.2. Where the promoter of NOFHC meets with condition of 2(C)(ii)(b), whether individual promoter/ his relatives / entities in which they hold more than 50 per cent shares must hold equity shares in NOFHC [refer 2(C)(ii)(a)]. +

It is not necessary that individual alongwith his related parties have shareholding in the NOFHC. However, if any individual belonging to the Promoter Group chooses to become a promoter of the NOFHC, he along with his relatives (as defined in Section 6 of the Companies Act 1956) and along with entities in which he and / or his relatives hold not less than 50 per cent of the voting equity shares can hold voting equity shares not exceeding 10 per cent of the total voting equity shares of the NOFHC. [para 2 ( C ) (ii) (a) of the guidelines]

Q.2. Can LO/BO maintain more than one account in India? +

Ans. No, if an LO/BO wants to open more than one account it has to obtain prior permission of the Reserve Bank through its AD Category I bank justifying the reason for additional account.